Bank customers will able to access up to half a million shillings of their deposits according to the Kenya Deposit Insurance Corporation (KDIC).
In a statement, KDIC said it has increased the coverage limit in the likely event of bank failure in their new raft of measures which are expected to cushion banks from the effects of Covid-19 pandemic.
“As we told you last year, we are revising our deposit coverage from KSh100,000 to KSh500,000 effective midnight tonight. This will increase the coverage level from the current 97 percent to 99 percent. In the very unlikely event of bank closure, we are able to pay 99 percent of the depositors in full,” said KICD CEO Mohamud Ahmed Mohamud.
This means in case a bank collapses KDIC will cover up to Sh500,000 per depositor up from KSh100,000 previously.
“This translates into an increase in the insured deposits from the current KSh294 billion to Sh658 billion. That’s what we are supposed to pay in the very unlikely banking industry collapse” he added.
Mohamud also said they have given lenders a six month grace period to pay their annual premiums.
“We have also decided to waive the premium of 0.15 per cent of deposits that banks are required to make from July to December,” Mohamud said. “While this will impact our revenue streams, we hope to offer banks a reprieve to invest that money in other areas.”
Currently, lenders pay an annual premium at a flat-rate of 0.15 percent of the average total deposit liabilities or KSh300,000 per bank, whichever is higher.